Smallbone Deceased

“I’ve no idea at all,” said Henry truthfully.

V

“Well, now, Mr. Hoffman,” said Hazlerigg. “I understand that you’ve finished the first part of your work and can give me a general report on the financial position.”

“An interim report,” said Mr. Hoffman. “Then, if you consider that any particular aspect of it wants detailed analysis—”

“Let’s start with the general picture, if you don’t mind.”

Thereupon Mr. Hoffman spoke for an hour, with very little interruption from Hazlerigg. He had a sheaf of notes but he did not refer to them much. It was in his head.

He spoke of capital assets and of invisible assets, of fixed assets and floating assets; of goodwill and the professional index; of the solicitor-client relationship; of the ratio of incomings to outgoings; of over-all balance; and of the law of diminishing returns. And every point which he established was nailed to the table with figures—pounds and shillings, and years and months, and percentages and fractions.

When he had done, Hazlerigg said: “Thank you very much.” Then he said: “I take it you will be letting me have the gist of that in writing.” Mr. Hoffman nodded. “Absolutely off the record and without prejudice, what does it add up to?”

Mr. Hoffman considered the question. Then he parcelled his papers neatly back into his brief-case, screwed on the top of his fountain pen, replaced his pen in his inside pocket (where it lived with three coloured propelling pencils) and leaned back in his chair with a relaxed smile; a parting of the lips which, in a man less austere, might almost have been called a grin.

“I always think,” he said, “that starting a business is very like lighting the drawing-room fire. First, you stack up the sticks and paper and coal in the grate, and then, at the favourable moment, you apply your match. There’s an immediate and beautiful blaze. The paper burns away and the sticks crackle and you put on more and more coal—that’s your working capital—and you get precious little real heat by way of return. Then, in every fire, and in every business, there comes a moment when you know if the thing is going to go or not; and if the fuel is dry and if the draught is right, and if you’ve laid the thing properly, you’ll get a decent fire. If anything’s wrong, then you can prod it and puff it and pile on fuel till you’re black in the face. You’ll get nothing but smoke, stink and a hearth full of charred paper. But once the thing’s alight there’s nothing more to it. The office boy can keep it going. He’s only got to drop an occasional lump of coal on. Incidentally that’s one of the things people don’t think of when they moan about the boss sitting back and taking the profits whilst they do all the work. Anyone can look after a fire when it’s alight.”

“Agreed,” said Hazlerigg. “What then?”

“That’s all obvious, isn’t it,” said Mr. Hoffman. “Anyone who thinks about it can see it. But what people don’t always realise is that it works the other way round as well. A good fire, you know, will go on burning and glowing and giving out heat for a long time after you’ve stopped putting on any fuel. And if you put on a little from time to time—not enough to replace what’s being burnt, but a lump or two—well, it’ll go on burning for a very long time. That, as nearly as I can explain it, is what was happening in Horniman, Birley and Craine in about 1939 and 1940. I don’t think anyone could have spotted it from outside—but the fuel supply was giving out. Partly,” went on Mr. Hoffman, “I expect it was the war. Partly the fact that the system they use here, though an excellent one, isn’t productive of very quick or profitable returns. It would be admirably suited”—Mr. Hoffman did not intend this satirically—“to a government office. But chiefly, I think, it was the fact that whilst the incomings were decreasing the liabilities were increasing—especially Abel Horniman’s liabilities. They must have been. He had his big house in London and his country house and farm in the country, and he was beginning to attain a certain position, a position which needed money to keep it up; money, and then more money.”

“I thought his bank account was rather a modest document,” said Hazlerigg.

“I’ll give you one example of the sort of thing they were driven to. This building is leasehold. Not a very long lease. Every well-run business which operates on leasehold premises puts aside a fund against the day when the lease expires—for repairs and dilapidations, to say nothing of the premium that they may have to pay to get the lease renewed. Horniman, Birley and Craine had been building up a leasehold depreciation fund for a great many years. Well, in 1939 they stopped adding to it. In 1940 and 1941 they drew it out and spent it.” Mr. Hoffman paused for a moment to marshal his thoughts, then went on: “What happened next is the most difficult of all to explain. But sometime, about the end of 1941, the firm had a blood transfusion.”